Abstract
In this paper, we investigate the formative mechanism of the Easterlin paradox in China using 2010 Chinese General Social Survey (CGSS) data. By establishing a multi-factor, multi-level dynamic framework, we unveil the formative mechanism of the Easterlin paradox. The impact of multiple factors on subjective well-being and the influence of micro-level individual factors conditional on macro-economic development were analyzed. We find that with economic growth, on the one hand, material needs upgraded to enjoyment needs, and the return to well-being from material conditions decreased. On the other hand, the intensity of social inequality triggered relative deprivation, offsetting the return from economic growth. Therefore, subjective well-being stagnated, instead of increasing with economic growth.
Highlights
In this paper, we investigate the formative mechanism of the Easterlin paradox in China using 2010 Chinese General Social Survey (CGSS) data
It is surprising that these countries differ in historical tradition, culture, political system, natural environment, and economic development, they have all experienced the subjective well-being (SWB) phenomenon described by the Easterlin paradox (Easterlin, 1995; Clark et al 2008; Xing, 2011; Walsh, 2012)
Corresponding to the Stolper-Samuelson theorem discussed above, we describe the effect of micro-individual factors on SWB conditional on macro-economic development as the following: with the development of the macro-economy, the relative importance of material wealth decreases, and that of developmental factors increases
Summary
Data We used data from the 2010 China General Social Survey (CGSS). The CGSS uses multi-level probability sampling, drawing from 100 townships, 480 villages/residential councils from all provinces (or equivalent units), and 25 families from each residential council. Independent variables The key independent variables for this analysis fall into four categories: economic development, socio-economic status, quality of life, and social inequality. Models The sample used in this analysis spans two levels: micro-level individual characteristics and macro-level national economic development. Based on the study framework, regional economic development improves the material condition for people in that region, changes the relative importance of various factors in affecting SWB, and intensifies social inequality. Because micro-level factors are embedded in macro-level factors, we use a hierarchical linear model (HLM) to investigate the influence of social and individual level factors, and the effect of micro mechanism, conditional on economic development, on SWB. Xpk 1⁄41 γ k 0 þ γk1W μkj Xkij where Xkrepresents explanatory variables at the micro level, including educational attainment, income, entertainment, and cultural entertainment expenditure.
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